Ep. 4 They’re More Flexible Than They Know Featuring: Sean Scope

speaker-0: This is the Exit Series. I’m Bob Rourke. This is for founders, brokers, and attorneys, the people who are in the room when the deal closed, talking about what happened next. This is the conversation very few or nobody else is having. My guest today is Sean Scope. He’s director of sales and operations at TSP Family Office. Before we get started, Sean, tell us about your firm, what it does, and what your ideal client looks like.

speaker-1: Perfect. So thanks for having me, Bob. It’s a pleasure to be here and all the people out there. TSP Family Office is a 28-year-old privately owned consulting firm. We cut our teeth providing tax saving strategies. we couple that with operational consulting for efficiencies and even increases, as well as all of the steepest stuff and driving value. typical client or our best. Potential client is somebody with an AGI, adjusted gross income of over a million dollars, business, sick and tired of overpaying their taxes, wants to increase the efficiencies in their business, see the EBITDA go up, and always concerned about where the value in their business is, whether they’re thinking about exiting or not.

speaker-0: Excellent. Yeah. Well with you know with this being said, in your previous life you spent years doing PE turnarounds, sure fixing companies on someone else’s clock. Then looks like you went to the other side to work with the owners before they have a problem. You know, with that being said, what did you see in the turnarounds that prompted you to go, I want to get to these business owners a couple of years beforehand?

speaker-1: Sure. So first and foremost on the personal side, I was away from home a lot. traveling all over the place. And at the time, my daughter, who’s in those pictures above my head there, was just a little one. And so I didn’t want to miss out on it. Although the work was challenging and I probably work with the smartest people I’ve ever been around. I did not want to be absent in my daughter’s life, so I decided to take a break. The other piece of it from a technical aspect is I didn’t want to hurt people anymore. meaning that, you know, a lot of the plays were strictly Ibida plays on the flips because they were we had a very short amount of time to get the Ebida up to where the private equity firm would take it again and sell it right quick and make their profit. Well, a big part of that was unfortunately having to let people go. and you know, I was just doing my job, so to speak, but after a while it really it it really it tears at you the human side of things. when if you just had a little bit more time, you know, maybe you could influence the culture to change a little bit, maybe pick pick up productivity. But because you’re wrestling with the clock in the calendar, you’ve got to get the results in a certain amount of time. So, you know, It was great for a while it lasted. we did some excellent work, but I really wasn’t interested in having to be you know, a hatchet man or go in there and just take the orders and just do it. I wanted to be able to take my talents and actually work individually with people where I can influence what happens in their life and give them some control. The other way around, coming from the buy side, it it was just all business. there was really no it wasn’t humanized at all. Very very sterile.

speaker-0: You know, that’s a theme that keeps coming up, humanizing the process. And true it’s not what I would have anticipated, but it’s, you know, I think a welcome development. You know, f what I think happens, my observation is, you know, most folks come up in this work, they come up through tax law or banking, and you came up through the organizational psychology of Johns Hopkins. You know, with that particular lens. What do you see that the rest of us typically miss?

speaker-1: Wow. That that’s a pretty broad question. So I’ve always I’ve always worked in in operational consulting, whether that be in Washington as a beltway bandit or in the private sector from the buy side or now in the private sector on the on the sell side. I you know, a lot of times what happens is is people start to make this plan and they look at nuts and bolts, whatever the goal is, whether it’s increased value, Grow the top line, scale it, whatever it is, they always put together this plan and then they find out after the fact that well, maybe this person isn’t right for that piece of plan. Maybe this. So I’ve always looked at the human capital first. We talk about the four capitals and and exit planning, right? Human capital, it really boils down to people. If you don’t have the right people that can perform the work or people that you could at least motivate, persuade influence. to drive the work, make them better at what they do for an opportunity, it’s just not gonna work. And so I’ve always looked at, okay, who who are our nine players? Who we who are we throwing out on the field? Before we have a game plan, who are the players? Because your game plan is flawless, but if you don’t have the right player, it’s not gonna work. So I was always the dead advocate, looking at it from a different perspective. and that you know, rounds out a nice team when you’re dealing with, you know, CPAs and finance people and not really concerned or their primary focus is not on the people. It’s on the results and coming up with the right mathematical equation of what has to happen. I remember going in on several jobs, Bob, where the group would say, okay, you know, we’ve got to do this in production, we’ve got to do this. We’ve got to watch the schedules. We’ve got to look at this. All of these mathematical variables. And then they would get it out and they’d say all that stuff and they derived at these conclusions from looking at financials and maybe interviewing some people. And they’d say, okay, this is these are the things that need to happen. Here’s the priority. Here’s how quickly they have to have. And they would turn to me and say, Okay, Sean, how do we get people to do this? Well, to me, that’s pr pretty important because again, if if your plan is not you’re not able to execute the plan because you don’t have the right rules in people. then your plan isn’t worth anything. so unless you can execute and implement that plan, it doesn’t work. You’ve got to have the resources and of those resources, the people, and getting them to buy in and accept a whole nother piece. But if you don’t have the people, it’s going to be a very, very different road. So I always look from people first out into the anybody can do math, but you can’t teach personality. so You know, I always look from the people first outward into the mathematical equations or the planning that way. and in in reality, it’s it should be a a a balance of the two, not one way or the other. however, if you have a team that’s balanced where one perspective comes from the human capital, one comes from structural capital, because that’s what we’re really talking about, somewhere in the middle they meet and your adjustments along the way so that not only is your plan well defined, but you’ve also got the tools that people that can that can implement it and execute it.

speaker-0: Yeah, the I I think the the plan versus execution, you know, plans are all well and good. without execution, well, they’re not all that useful. You know, sounds kind of dumb. But, you know, for for you, tell me about you and TSP. You know, can you walk us through what you do and what you’re thinking when that owner walks through the door? You know him, you know, within 10 minutes, if perhaps you can make a dent for them. What’s your process? to try to make that assessment when you first talk to an owner.

speaker-1: Relative to exit, I’m assuming, because we do a couple of different things. well, you know, I wanna find out. It’s almost like trying to write a history book on this person. So if I know n if you’re talking about starting from ground zero, I know nothing about this person. and they’re coming to us for exit planning, the first thing I’m gonna do is make sure that I can meet them where they are. so one of the questions I always ask, and I preface it with a little cushion, is you know, in order to be a very good steward of your time. And so that we can align expectations and this can be productive. What are you hoping to learn today? That’s the question I ask. And anybody can ask that question. And not that I’m trying to get a specific answer. I’m just trying to get an answer. so if if the answer comes if the answer comes back on the positive, where they identify, well, I’d like to know how much my business is worth. I’d like to know what it’s going to take to sell my business, then it’s just a series of why questions. Why is that important? Now. Why is that important now? you know, have you tried this before? Why didn’t that work? If it’s a negative or they fight it and say, well, you know, some guy gave me your number and I called you and I didn’t I didn’t know what this was all about and everything like that. So that’s a little bit more difficult and you have to approach it a different way. You’ll see when we talk today, I’ll start the conversation with, well, it depends who’s in front of me. So the first thing that I do when I meet a potential client is I I try to identify their a personality type so that I can cater my communication to that type of personality. So if I had a very strong driver type personality, typical entrepreneur, big ego, well, I don’t need this. I know already know everything about my business. Okay. So how much do you think your business is worth? So I challenge. I meet him head on. He puts up his dukes, I put up my dukes. If somebody comes at me and and is, you know, honest and not defensive, and they say, I’d really like to know what my business is worth Hey, let’s get started on that. How much do you know about how businesses are valued? So I always take an educational approach to introducing concepts or starting the conditioning of the client. Okay. The conditioning is the ability to control where that conversation goes and where you into that conversation. I certainly don’t want to spend an hour talking with people just to get enough to find something out. I want to be efficient with my time, but there’s a way that you can do it catered to that personality type and asking questions in a way that will promote positive dialogue and moving the needle forward. Somebody doesn’t want to talk, I’m not gonna put them in a headlock. It doesn’t that doesn’t work. What I’ll do is I’ll yeah, I’ll ask them a better question and I’ll continue to give why, why, why now, why not later, all of those types of questions. And so they will they will leave the breadcrumbs for me to know which path to take. But it’s really important that you understand who you have in front of you, you know, an analytical type, a driver type, somebody that’s ambivalent, somebody that’s doesn’t want to talk about they want to talk about everything except why you’re there, you know. They want to tell you about their time at me or I played this course or something. To me that’s great, but you’ve got to keep people back on the track. That’s why I start out with that question. What are you hoping to learn?

speaker-0: Yeah, it it it prompts thoughts for me. When you through your years, if you were to name or classify the people that walk through your door, are there terms or you know, like you know, like you said, you know, a driven entrepreneur or others, are there titles or categories that you mentally think about to bucket them into?

speaker-1: Sure, I use a f I use four quadrants. usually depends on the situation and what we’re talking about. I do this in personal life too. I just want to be able to be an effective communicator. so if you can skinny down the personality type so that you can cater the conversations and and know what not to do to those types of people. What questions don’t you ask those guys, right? ‘Cause some of the questions and some of the dialogue is universal. It applies to everybody. But then when you get under the skin, you scratch the surface, the questions become either a little bit more direct, sometimes they’re more indirect. Some people need kind of asked and answered to lead them on the way if they’re introverted, they don’t want to speak. a lot of it has to do with the physicality of somebody. I find out where they ’cause sometimes you can be wrong. You say, This guy’s He’s an engineer, that means he’s analytical. Well, most of the time. But there’s nothing that says that this guy, you know, isn’t an animal rights person or has it has a softer side. So you you you kind of have to find where to meet them and communicate best. And you know what? It’s perfectly okay to let them know that you’re vulnerable too, because nobody’s going to share intimate secrets or thoughts with you. And without you doing a showing that you’re vulnerable as well. There’s an old saying that when this becomes transactional, it’s not gonna work. There is a relationship and that’s what people want. They want to be able to trust you. You want to be able to trust them. The best way to do that is be a little vulnerable. Make fun of yourself a little bit. Be okay with that because you want them loose. No, I I don’t whip out a form and start asking them questions like that. It’s extremely loose, but in my mind, I’ve got, let me find which path we’re going to jump on here. And then while on that path, then it’s it’s the same goal. I got to get to this point by the end of this session, or we’d like to try to get to that point if we can. it’s about controlling the situation with the client and guiding them down the road so they don’t feel like they’re being dragged. Okay. I want I want to push a little bit. I want to guide. Just a hand on the back, like on the small of the back. If I was you know almost like leading the dancing. Okay. And Bob, I know you’re probably a wonderful dancer, so I wanted to use context that that resonates with you. but yeah, it is it is a dance and you have to you as the consultant, you have to lead. and a big barrier is is it transact you know, don’t make it transactional. don’t allow them to make a transaction. So offer something up about yourself. If you’re going to ask them a tough question, let them know what you feel about it, you know? So I I would I would never want to be an entrepreneur. And here’s why. Because there’s a lot of pressure, right? There’s the ability or the inability not to succeed every single day. The responsibility for all those other people. That’s a lot. That’s not in my makeup. So I can Appreciate what you’re going through as the founder, as that entrepreneur, all of those things that you didn’t ask for that come with a job, it’s a heavy load. And I understand that. So you want to empathize, right? You want to understand where they’re coming from until they know that you understand where they are, they’re never going to give anything up. So you have to empathize with them. And the best way to get to an empathy statement is to give something up about yourself to show that, hey, go ahead. You know, it’s like Do do you know why people shake hands? This is the old it was they showed no weapon in my hand. It’s a safe gesture. So how do we give a verbal handshake showing them no weapon? So I’m taking that away, taking their defenses away so that we can move forward in a positive way. But giving a little bit up of yourself is is the easiest and quickest way to get there. You don’t wanna you don’t wanna fight fire with fire.

speaker-0: know, th this may be a question that takes kind of a different side of what we just talked about. You know, in in a triggering event from the owner’s side of the table, you know, in the first little bit of time, what do you think that they’re expecting versus what they’re getting from from the process?

speaker-1: You have to ask I you know, I I mean in my exper it’s been all over the place, Bob. I can’t say that this is always the same thing. I could tell you one thing that is across the board is every business owner thinks their business is worth more than it is. Period. And that’s just a sense of pride. They would not be entrepreneurs if they didn’t believe that. everybody believes their child is the prettiest or most handsome, everybody believes that this, that, or the other thing, and that’s That’s part of who we are as a society. I get that. But they’re, you know, depending if they’re at ground zero and know nothing about exiting value, anything like that, versus someone that’s done a pretty good job and has had valuation done maybe for lending purposes or an inside acquisition where they acquired a business. They were the buyer. So there’s some knowledge. So I have to know. And the best way is just ask a question. On a scale to one, I use scales because that tells me where they are. Scale to one to ten. What do you think your expertise is on exiting business and how they’re valuated? So the guy tells whatever it is, discount at twenty percent, and that’s the real number. So the guy tells me seven, he’s a five and a half. You know, he’s a five point six. So he’s he’s more than someone that has no knowledge, he’s a little better than halfway. So then I would ask another question, something like, In your experience, have you ever been through an acquisition or a sale or yes? Okay. Well, what was what was your most favorite part of that? What was your least favorite part of that? So now they’re telling me, and then it becomes the answer to that is why was that least important? Why was this? So I’m getting to the person. I have to know who I’m working with because that will allow me to make recommendations that align with their tolerances. Because anytime if you try to force something down somebody’s throat, I’m a hundred percent they’re gonna throw it out. You want them coming with their spoon saying, put it on my spoon. So there’s there’s always an alternative in the question I’m asking. Yes, I want the answer, but it’s telling me much more about the person because we’re dealing with a person or this partner’s multi you know, then it’s times three or times four. So if I’m doing a job where I might need to go in and facilitate some sort of managerial intervention between three, four partners, because they’re not aligned and getting that alignment, much more difficult task than with one person. One person you could break down pretty easily, get to what you need to do and start building from there. And everybody feels good at the end. The more people in the pick, the more variability, the more that can go wrong. And I’m not that optimistic that I think the more that can go right, not in this situation. It’s more.

speaker-0: And you’re do these folks typically come in with their spouse or no?

speaker-1: Well, we have two different types of clients. We have clients that are on a recurring revenue model with us for all kinds of service and exit is is is offered as an ad hoc. And then we have clients that come to us that want just specific portions of exit done, like a triggering event or 90 day sprints up to a certain point. If the wife is not an owner on paper. that typically doesn’t stop us from inviting the wife. In fact, we try to in a lot of cases, the wife is our secret weapon. you don’t want to make any one legged deals, right? You want everybody you gotta find out who can tell you no. So one of the early questions on is like, you know, well, I’ll know they’re married. How involved is your spouse in the business? Well, she doesn’t know anything. Do you guys discuss business at home? Yes. What do you typically talk about? Challenges, achievements, you know. So let them go on. and how do you guys make decisions with the business? How much do you value her impact? It’s the old sales technique of avoiding the wife or partnership objection by taking it away in the beginning and getting them involved. I would much rather meet the wife on the first meeting and she tells me my feet stink, I don’t believe in Jesus and it’s over. At least I didn’t waste three, four months. work and to find out later that she or he would blow it up. So yes, I would highly recommend getting a spouse involved, especially in a transaction that could be millions of dollars. They’re definitely going to talk to their spouse about that. It’ll be rare if they don’t. And in the occasion where a client might say, she has nothing to do with this, I make all the decisions, I’m gonna take them at face value and say, okay, okay. But don’t come back and tell me I need to talk to my wife about it. Because I’ll go back and hold you accountable. I’ll even Are you sure? We’re gonna get to a point where there’s gonna be some pretty tough decisions. Are you sure you don’t you won’t want to seek her counsel? As your spouse and as probably your best friend through your life. So yes, get the spouse involved as early as you can. Don’t look at it as a threat. Look at it as your secret weapon. And sometimes that’s the way to get things done. You gotta go through the spouse to get to the hard headed husband. She knows how to do it because she’s been married to him for fifteen, twenty, thirty, forty years. She’s the she’s the expert on the client. Why not why not enlist them?

speaker-0: You know, in in some of those session there’s a moment where the room sorta goes quiet and the owner has an aha moment. What’s that realization that creates the environment for the biggest pivot for that owner in the in the next ninety days or so? What comes to mind?

speaker-1: Well, typically it’s something that they didn’t know before, right? It’s new information. and the silence is the reaction to it because quite frankly, they don’t know how to respond to it. They don’t know how to respond. So the easiest thing to do is to do nothing. And so I would tell you this when it there is that dead spot. So, you know, quick role play here. Okay, Bob, so we’ve gone through this. It looks like your business is worth about four million dollars or three times zebra. And I know that might sound disappointing to you. what do you think about that? And then it goes silence. And it’s the game of chicken. First person to talk loses.

speaker-0: Okay.

speaker-1: So I don’t they I don’t say a word. I wait for them. And if nothing happens, remember, fifteen seconds can feel like five minutes. especially if you’re not the one that’s hanging on. I’m I’m looking at the client. I’m noticing is their leg jumping up and down, are they tapping their fingers? Where are their eyes? What are they looking at? Are they touching? Are they stroking their are they doing some of this? Which is thinking. Are they sc are they scratching something? They get itchy, they’re uncomfortable, they seem hot. Just don’t say anything. Watch. And that’s going to tell you where they are. And most of the time, again, their business isn’t worth what they thought it would be worth. And that’s a different conversation. So you can take that pivot and say, okay, so there’s good news and there’s better news. The good news is we know exactly where we are. The better news is that I know how to improve that.

speaker-0: Mm-hmm.

speaker-1: So when would you like to get started?

speaker-0: That’s that’s a good pivot. That’s a good pivot. You know, for you know, thinking back in in the memory bank, you know, without names, of course, you know, the owner walks in and said the business is worth, in our in our example, three or four million bucks today, right? And you want to take in and go through the process, and they get ready to sell and they follow your process. Typically, how long does that take? I know it’s not the same for everything. And, you know, I think a lot of times business owners don’t fully appreciate the value creation that happens working with somebody like you between the current value where they stand today and where they may exit if they bring in your help. What’s the typical delta between entry value and and the value after the work that you do?

speaker-1: There’s a lot of other factors that will go into how soon somebody can increase the value of their business. again, somebody comes in at ground zero and knows nothing, not even about how multiples work and what de-risking is and what are intangible assets and you know, which which of the factors carry the largest p potential discounts in them. So we I mean we’ve had We’ve had some clients in a year’s time increase their multiple by two, going from a three to a five. In one case that was you know, close to two million dollars in value. and a lot of it people just don’t know how businesses are valued and what buyers look at and how to fix so a lot of it again goes back to awareness and education. I would strongly recommend that you start with low hanging fruit. Don’t give the hardest potential variable or factor to work on. and the fact that you think it’s gonna get done in ninety days is awfully lofty. Some things we have ongoing nine we we renew ninety days, renew ninety days, renew ninety days. So it’s it’s a process. So I think if you’re focused and depending on the shape the business is in, void of no five Ds for selling reason, right? They’re interested, they’ve got time, they If they can get it, if they can get that value to move up, you can actually get to the point where you’re you’ve got the EBITDA going up and the multiple going up. True acceleration, then that would be wonderful. That tends to take a little bit longer than just let’s package the IT, let’s package the marketing, let’s get that done, let’s get it from a three to a five. I just picked up four points. I moved from fifty-eight to sixty-two. I’m at a five multiple now. So I mean, gotta get the low hanging fruit first. have the client enjoy some success early and not be discouraged so that you can build momentum and keep building on that. I think a mistake that a lot of CEPAs make or value advisors make is they try to tackle the biggest thing first because it might present the largest discount. And I understand that philosophy, but if you’ve got a client that, you know, says I’d like to three to five years, okay. You’ve got to condition that client to understand that it’s probably more like five than three. However, we can work like the goal is three. And if we overshoot it a little bit and ends up at four years or three and a half years, you’re still better than five. So let’s let’s really establish some expectations. and that’s really all this is. When jobs blow up. It’s because, I thought this and you said that and I said this and you said that. There’s no excuse for that. We set the expectation, get them to agree to the expectation. This is what’s going to happen. And as the consultant or the advisor, it’s your job to hit the mark. Don’t promise something that you can’t deliver. I would never do that. I would tell them, look, that’s I know you want to leave in two years, but you’re going to leave a lot on the table. And maybe do a little exercise with them. Say, look, if we if we put another, is it worth an extra year of work on the value to walk away with the net proceeds, what what would have been your post proceed? Because remember, it’s not what people pay you for the business, it’s what you walk with. I get paid, the lawyer gets paid, the bank gets everybody gets paid. It’s not like somebody buys your business for $10 million, you stick that in your pocket and you get the finance. us for the next five years. That’s how it works. So you have to be prepared to lay that out. And what do you need to walk with? The other piece, and I want to mention this because it’s important, is it’s really important that people figure out if there is a wealth gap and is the sale of this business dependent on them meeting their wealth goal. If it isn’t, then it’s a completely different scenario of how this business is sold, even the conditions and the type of sale it is versus This person wants to continue their lifestyle. They don’t have a whole lot of net worth. They’re going to need to sell business. They’re going to need to walk with 12 million. Currently it’s worth four. We got our work cut out for us. And the answer isn’t, you know, just your expectations on what you want to live on. That’s your goal. My job is to try to make it happen. I’m not going to tell you you need to live on half. That’s not advising. That that’s me taking a shortcut as a consultant. That’s not good advice. That’s not good advice. What you have to do is figure out okay, how can we get them?

speaker-0: D do you think the owners that you’ve worked with when you look at, you know, there’s the expense of bringing in your company versus the increase in value of the sale price, do you think they ever do the ROI on that investment of your expertise and and work?

speaker-1: They don’t have to, I do it for them.

speaker-0: there you go. You know, in in talking about some of the stuff, you know, the buyers can say that, geez, we’re paying for de risking. You know, de-risking what specifically? And for you and your observation and career, what are the top three things the buyer wants de risked that produces the largest dollar outcome for them?

speaker-1: I can tell you what the three largest ones are, whether they want to believe it or not is another thing. So first and foremost is owner dependency. you’re gonna get a huge, huge hit on that. and this is in no particular order. lack of marketing documentation on how they actually create their revenue. that’s a lot of that is they depend on whoever’s doing their social media to give them Reports, matrixes, market share stuff. That stuff wears out. That doesn’t last forever. You have to do that every at least twice a year. and if you’re running a fiscal year, I would recommend that you run calendar and fiscal. So that would get you a couple of times during the year. And the last one is huge because it can it’s hard to install this in some businesses, and that’s a recurring revenue model. What the What the buyer wants is predictability to re historical performance is great, but it doesn’t assure anything. They want to know what’s in the pipeline, what how many people on a subscription right now? So one of the things that we’ve done at TSP is taken businesses that don’t typically have recurring revenue models and institute one. And an example of that might be a contractor having a maintenance program, much like air conditioning HVAC guys do. You buy the internet, they install it, and then a hundred and eighty hundred and eighty bucks a year or two hundred bucks a year, they come out and service it. So that’s guaranteed income that you’re getting it’s contracted with. It’s difficult to get that. And that’s the returning revenue or the systemic predictability, not the historic predictability, because historic is, well, this is what you did over the last three years. We’re going to assume that this is going to Don’t assume anything. Would you have to be able to prove that. So having a systemic proof that you either have recurring revenue or you have to have an internal system documented well that predicts what the revenue is going to be over the next three to five years. And it really is science more than anything else. If you say, well, we’ve grown at 10% every year since our existence, yeah, but That doesn’t tell me what you’re gonna do in the next three to five years. I can sit here and assume, but the best business people that I’ve ever met in my life don’t buy things based on assumptions. They want they want to know that this is gonna cover whatever it takes to get into this deal. So systemic predictability in revenue top line. Okay. the best way to do that is to have some subscription or some recurring revenue element to the business. But those are the those are the three. Dependency, recurring revenue, and what was the other one I was talking about, Bob? I lost tr I lost my thought here. Recurring revenue, dependence,

speaker-0: And then yeah, dependence. And then the marketing, wasn’t it? Marketing?

speaker-1: Lack of mark not being able to prove how you what your science is behind your go to market and all that stuff. and that kind of correlates with products and services that are on the horizon that aren’t installed yet. I and so there’s a little bit of projection, but I find that the less projection you can have, you need some element of it. And the more systemic, provable data, especially when it comes to revenue, because that’s what they’re buying they’re buying futures. They don’t care what you did. three years ago. They’re not buying that company, they’re buying the company today. So

speaker-0: You if you if you could measure from monthly recurring revenue add on business that comes from just going in and doing the service work and prove it, that’s something that’s identifiable for the buyer.

speaker-1: Sure, absolutely. Absolutely.

speaker-0: Yeah. Y you know, we’ve we were we’re talking about owner dependency, you know, I guess owner identity is a lot of that too. And you know, so you know, if the owner’s the business, which is part of the problem, makes it less sellable. How do you get a founder to dismantle that need for indispensability without feeling like they just died? What do you do?

speaker-1: I correlate it to life. Death is inevitable. You’re gonna die. I’m gonna die. And your business will have will die at some point. It won’t be out of business, but it will die. It will no longer be yours. Doesn’t have to be a bad thing. So

speaker-0: Mm-hmm.

speaker-1: one thing that I will tell you is is that the owners don’t want to deal with that one because of the identity and being one and the same. but they’re really it’s fear based. They they’re They it’s going to be a change for them, a very major change. So anytime somebody fears change, you have to let them know what’s not going to change first. they feel helpless. They feel like they don’t have any control and it just happens. Look, some people believe that you go to heaven after you die. That’s a good thing. So a lot of people are okay when their time comes because they think, you know, they believe they’re going to heaven. There’s no reason why a business owner can’t go to business heaven. Okay. So you can ask the owner, good question here. Wow, if you could design your own death, what would that look like in your life? What would that look like? Just go to sleep at night, one what would that look like? And so the business owner tells me that stuff. And so I said, That’s very interesting. Thanks for sharing that. You know we can’t do that, right?

speaker-0: Yeah.

speaker-1: However, however, when it comes to your business death or the end of your business, you have all the control in the world of how you want that to go down. So this isn’t a bad thing. So it you don’t let go of it like it’s your life. You’re not dying. It’s just a piece of what you’ve been used to is no longer going to be yours. So it helps the business owners if they know that they can have control, which plays into or cuts into the feel that they have about change. If they can control it, they feel a little little more confident about engaging and getting into the process. So if you could design your own death, what would that look like? Let them go on. And then you know, right? Of course not. So you have a chuckle. Said the good news is is that you can design the way the human business ends its life under your control.

speaker-0: You know, in somewhere in your career, you know, where you were doing a ninety day sprint and the sprint just didn’t work out. And you go back and do a post mortem on why the sprint didn’t work out, what did that teach you back then that you now employ now to either avoid or scope that properly?

speaker-1: Good question. We touched on this before. low-hanging fruit, early wins. Don’t try to, yeah, I know that poses a 30% potential discount, and we got to get to it. Be patient. Set the foundation, set the expectations. If you try to enlist the client to work on a factor that is so complex and so huge, first, you’re going to lose them. They’re going to lose confidence. They’re going to say they become a 5D seller. They’re like, good enough. I never expected to make a dime in this thing. So anything above that’s good with me. I don’t care. I’ll just use 20% of what I make to pay the tax. Whatever those excuses are are just fear of not being able to get what they deserve, right? Let’s talk about what people deserve all the time they put in. So don’t go after the big obvious thing first. Mm-hmm. Take some low hanging fruit. Every single person that I’ve ever met with doesn’t have a written goal about their exit, what it looks like, when it happened. Have them write a smart call. Just do that. They can go from a two to a six. They can gain four points in if because that’ll become foundational to the way that you attack this thing.

speaker-0: No, confidence and momentum. Yeah.

speaker-1: Absolutely. So get that going, drive it forward and build and get progressively more involved. And the owner will start pulling in people from their organization to get involved. Give that owner the first assignment. Don’t have him have his assistant write his smart goals for. I always tell him get a cup of coffee, glass of whiskey, whatever you want, pen, piece of paper, and write it out. And y you might have to do it ten times. Have your wife sit with you, going back to what you said. Ask her her opinion. Because that bec that smart goal for how they want the exit to happen, when, how much, who’s involved, what the type of deal is going to be, the more specific, the better it is, measurable, and it’ll lay out my foundation for how I’m going to structure these ninety day sprints. So you start there. If they are a single owner and don’t have shareholders, they’re the only shareholder. Have them do it anyway. Are you aligned with yourself?

speaker-0: You and th and that sounds odd. But true. Yeah. Yeah.

speaker-1: Remember, we’ve got we’ve got a lot of ego. We’ve got a lot of bravado. It’s, you know, entrepreneurs are very proud. they don’t like to be wrong. They’ll listen and they’ll learn, but there’s a reality check. You talked about that uncomfortable silence or that pregnant pause, right? When we talk to these guys. They have to line with themselves. They they have to know what’s real and what it’s going to take. And usually after the triggering event, it’s it’s almost like You punch him in the stomach, you give him a hug. You pun that looks like it hurt. Let me give you a hug. Punch him in the stomach, give him a hug. Back and forth like that. And what that does is it shows empathy. It shows that you’re you’re tracking with them, that you’re aligned with them, you’re setting expectations of the tone throughout the whole thing. You cannot change the tone after day one. You don’t start parenting your eight-year-old when they’re eight. You start when they’re months old. And then it gets easier as you let the rope out. You can’t tighten the rope up once you get down the road. So I would say start get those expectations, set that tone so that that is the tone. And over time, when people prove that they can do the things and they’re delivering on time, they’re they’re contributing in a way that’s productive, you let the rope out a little bit. You give them a little and that’s when people start to develop. They start to get creative. They start to explore their curiosity peaks. Remember, they’re afraid they’re afraid when they start. It’s fear. It might not be sweating bullets and talking like that, but there’s fear inside because they don’t know. It’s the unknown. So if we can get them out of the unknown and start to devise their own track here, the confidence will come up and all of those other all of those other emotions won’t show up as often as they do in the beginning.

speaker-0: You know, in in your experience with these founders, you know, there’s there’s probably an underestimation that many of them make about themselves. What’s in in your experience, what would be that one underestimation that they typically make or that you’ve seen frequently?

speaker-1: They’re more flexible to pain than they know.

speaker-0: That’s something That’s something.

speaker-1: No matter how high you set the bar, human beings have the uncanny ability to reach it. So stretch your client. Not at first, gain the trust, but that bar gets a little higher. They’re a lot more flexible than than they know.

speaker-0: That that sounds like advice to the kids.

speaker-1: In some s in some sense the relationship is parent child to some degree. Somebody’s gotta be the

speaker-0: Yeah, I you know, and and what’s the downside? The downside is their business runs better. Their business is worth more. I mean there’s not a downside on that. You know, with with that, industry blasphemy. What does the exit planning industry get wrong that you wish somebody would really take and speak up and say it out loud so it would improve or get better?

speaker-1: This is a personal job. And and while you can form a a relationship with the client client, build trust, it’s important to keep your boundaries. because when push comes to shove, you’re there to advise, not there to just say that’s okay and let get away with stuff. I I think that From a CEPA standpoint, you have to be patient. Don’t try to do everything so quick. I know that there’s gonna be there’s gonna be a liquidity event and everybody’s looking forward to that, especially the owner, but the CEPA shouldn’t be looking to that more than the owner. It should be a byproduct work that’s almost like a bonus. Take an interest in really. your your your work will be more meaningful and it won’t just be a job and it won’t be transactional. So personal. relationship with boundaries so that you can trust and guide along the way. So I really think people look at it as and it is a business opportunity, but it’s you know, this isn’t selling widgets. This is complex, complex conversations, you know, high level communication, effective communication and listening, the ability to influence, persuade, Get people to make decisions that they might have never made before in their life. It’s you’re really develop you’re coaching to some degree, but you’re not a cheerleader. so there’s a big difference. You don’t want to tell somebody they’re doing a good job if they’re stinking up the joint. You know, you want to tell them you’re stinking up the joint. We need to do better. Let’s get a plan together. So I I I don’t think people realize how personal this is. And I’m not talking about doing the personal that leg of the stool. Anybody that’s involved in the exit process, whether you’re value driver, you’re a family planner, your personal planner, you’re the attorney, it’s a pr very, very, very personal thing because at the end of the day, someone’s going to remember how you made them feel, not what you did for that. I’ve never said any I’ve never heard anybody said, that was awesome. I hate that guy, but that was awesome.

speaker-0: Yeah.

speaker-1: So it’s about making them feel that they’re headed in the right direction, that they feel confident, that they trust. Once you break the back, basically, of the client where they kind of give you their belly, if you will, then that’s when the fun starts. But until you get to that point, it’s gonna be a struggle. And I think a lot of the seepers bail before they break the back because one, they don’t know how to, or they get frustrated and say, There’s gonna be so many businesses for sale. Why am I wasting my time on this one? I just won’t deal on it. So they’re being picky. Or if they struggle with that type of thing, then they can pick up the phone and call me and hire me to do it for them, outsource it. That way they don’t they get the best of both worlds. They keep their client, they get someone who’s conditioned, they’re on their way, and they didn’t have to go through it. They didn’t have to watch the surgery.

speaker-0: You know, giv given your industry and educational background, that’s likely to give you a frame of reference that the rest of us that don’t have your background don’t have. You know, what would be if you were advising the audience, whether it’s the owner or a SEPA, a diagnostic question that helps you read the status of the person across the desk from you, what would that be?

speaker-1: What are you hoping to learn today? That’s going to define whether or not they’re defensive or they’re ready to go. If they’re defensive, then you have to drill. But what what are you hoping to learn today? And the and the operative word is learn. Because if they if they give you an answer, then that means they’re gonna be receptive to learning something. So now it’s on the SIPA to teach them something.

speaker-0: That’s a good framing. That really is a good framing. Yeah. So next to last question. Right. What’s the question I should have asked you that I didn’t? I know that that one.

speaker-1: My gosh. maybe what’s I don’t know, there’s so many. What do I most enjoy about doing what I do or why do I do what I do? that’s an interesting question. I have purpose. I believe that’s people have to have a purpose, whether that’s self-fulfilling or globally fulfilling for others. Hopefully it’s both. But my purpose is recognizing that I have an uncanny ability to get the most out of people. And if I do not go out and do that, then not only am I hurting a potential pool of people that could be a lot better at whatever they do, but I’m also hurting myself by not sharing my gift. so I don’t know why it happens. I mean I have formal training and stuff, but I know other people that have the same education that just are not comfortable doing it. I guess from a humanitarian viewpoint, I I believe that people who need help should get out. Whether that’s in business or personal life or or anything. If you don’t ask for the help or don’t recognize that you need it, you never be better off. And so none of us will ever live this life perfect, but it doesn’t mean that we can’t live this life trying to be as perfect as possible. So my dream Yeah, my job is to help people facilitate that process so that they’re they get what they deserve and they can feel good about how they’re spending their time while we’re here.

speaker-0: You know, for the advisor that might be listening to the episode or the advisor’s got the client in front of or the owner, in fact, that recognizes themselves in this conversation, how do they find you? How do they reach out to you?

speaker-1: easy. I’m a pretty relaxed person. you’ll never see me wearing a jacket or a tie. That is my commitment for the rest of my life. so you can pick up the phone and call me directly. It’s seven seven two six four six six nine four seven. Just let me know you’re a SIPA. or you could email me. It’s s dot scope like the mouthwash at TspfamilyOffice dot com. Or link in with me. just let me know you’re a SIPA and you know, we’ll just We’ll just chat. So I always have time for people that are committed to the same causes that I’m

speaker-0: Sean, I I this is perfect. I appreciate your views and and observations and insights, you know, I think useful for whether it’s the founder or the folks serving that industry or that segment. This is the exit series. If you know of a founder who’s sold or a broker who’s seen it or an attorney who’s been across the table, send the episode to them and subscribe wherever you listen, and we’ll see you next time. Sean, take care, huh?

speaker-1: Thanks, Pa.

speaker-0: You bet.